Aer Lingus owner IAG plans to lay off permanently 12,000 staff at British Airways amid Covid-19 storm

The IAG international airline conglomerate says it may permanently lay off 12,000 staff at British Airways and warned recovery from the Covid-19 crisis for the group which includes Aer Lingus would take several years.

The proposed job losses at British Airways account for over a quarter of all the staff IAG employs at the airline.

IAG has been assembled over the past decade by IAG outgoing chief executive Willie Walsh and also includes Iberia and Vueling. Like all passenger airlines, it has been hit by the industry’s worst-ever crisis amid the global lockdowns that have closed down world tourism and business travel.

In an after-hours stock market announcement, IAG said most of the financial hit taken in the first three months of the year was due to British Airways “followed by Iberia and Aer Lingus, while Vueling experienced a modest increase in operating loss”.

It did not elaborate on any effects for Aer Lingus, Iberia, or Vueling.

“In light of the impact of Covid-19 on current operations and the expectation that the recovery of passenger demand to 2019 levels will take several years, British Airways is formally notifying its trade unions about a proposed restructuring and redundancy programme,” IAG aid.

“The proposals remain subject to consultation but it is likely that they will affect most of British Airways’ employees and may result in the redundancy of up to 12,000 of them,” it said. “As previously announced, British Airways has availed itself of the UK’s Covid-19 Job Retention Scheme and furloughed 22,626 employees in April,” it said.

Recovery in demand to levels of 2019 was expected to take several years, “necessitating group-wide restructuring measures”, it said.

The airline group was not providing profit outlook for 2020, it said. However, it said “committed aircraft finance facilities” totalled €9.5bn.

It posted an operating loss of €535m in the first three months of the year as revenues tumbled by 13% to €4.6bn from the same period in 2019, and it expected its second-quarter loss to be worse again.

Grounding of planes around the world has meant that it was currently flying with 94% less capacity than a year ago.